News

Nathan’s Famous reports 3Q loss

February 1, 2011

Nathan’s Famous Inc. reported results for the third quarter of its 2010 fiscal year, ended Dec. 26. For the quarter, the hot dog chain’s net loss totaled $153,000, or 3 cents per share, as compared to a net income of $1 million, or 19 cents per share for the same period last year.

Litigation expenses affected the company this time around, stemming from an October trial relating to Nathan’s termination of its License Agreement with SMG.

The company recorded a litigation accrual of more than $2.9 million before taxes. On Dec. 17, the court ruled that Nathan’s was not entitled to terminate the License Agreement.

Nathan’s is currently considering an appeal.

The chain did report a revenue increase of 16.5 percent, to $13 million, as compared to $11.2 million during the same period last year.

Nathan’s also announced that its board of directors has authorized the purchase of up to an additional 300,000 shares of its common stock. Purchases will be made depending on market conditions at prices deemed appropriate by management.

There is no set time limit on the repurchases. After giving effect to the increase in the number of shares, an aggregate 581,822 shares remain available for purchase under Nathan’s stock buy-back programs. To date, pursuant to prior share repurchase programs authorized by the board, Nathan’s has purchased a total of 3,718,178 shares of common stock at a cost of approximately $33.8 million.

The Nathan’s restaurant system consists of 268 units, comprised of 263 franchised or licensed units and five company-owned units (including one seasonal unit).